Whether you’re opening a bank account for the first time, or looking to switch banks, knowing how to choose a bank (and what exactly to look for) can be tricky. With so many traditional and online banks to choose from, the process can easily become overwhelming.
Here are five things to look for in a bank to make sure you find the right financial partner for you.
5 Things to Consider When Choosing a Bank
There are literally hundreds of ways you could compare bank accounts. You could look at whether they’re a traditional brick and mortar bank or credit union or an online bank, what kinds of fees they charge, what kinds of accounts they offer… the list goes on and on. If you’re feeling a little lost about how to choose a bank, start with these five elements.
1. No-cost setup and account maintenance
If you’re in the process of choosing a bank, a low or fee-free checking account should be a given; there’s no need to be charged for the pleasure of setting up an account. According to Bankrate’s 2020 Checking Account Survey, only 38% of checking accounts are honest-to-goodness free (including our Simple Account!).
Many other checking accounts are free if you meet certain requirements, such as setting up regular direct deposits and keeping a minimum monthly balance. But if you don’t maintain those requirements, you could be charged monthly maintenance fees.
Even if you were going to set up direct deposits anyway, or keep enough of an account buffer that you’re not worried about dipping below a minimum monthly balance, it’s less stressful to choose a checking account with no strings attached. That way, if something were to happen and you spend more than you want to, you don’t have to worry about getting hit with an additional fee.
When researching checking accounts, make sure you won’t be charged a setup fee, and that you’re aware of all requirements to avoid monthly maintenance fees. Better yet—look for an account that charges no maintenance fees in the first place.
You can compare checking accounts by looking at Bankrate’s Best Checking Accounts page which is updated regularly.
2. No fee surprises
Fees are one of three main ways most banks make money (in addition to interchange and net margins, which you can learn about here.) In addition to monthly maintenance fees, you can be charged by banks unexpectedly for overdraft fees, ATM fees, debit card replacement fees, and more.
ATM Fees Look for banks with low or fee-free checking accounts that have accessible and fee-free ATMs. If your bank or credit union doesn’t have ATMs that are convenient for you, it may be difficult to get cash out when you need it without getting charged additional fees.
It’s important to note that no matter what bank you have, out-of-network ATMs may cost you money because the ATM operator could charge you a fee to use their machine. However, some banks may charge you for using out-of-network ATMs on top of the ATM operator fee.
For this reason, it may benefit you to look for a bank that has a large network of ATMs, or doesn’t charge you out-of-network ATM fees if you travel often.
Read the fine print to make sure you are aware of when and how your bank will charge you fees. Double-check to make sure you’ll be able to find an ATM near you, and that you’ll be able to do most or all of your regular banking transactions without paying extra for them.
Overdraft Fees Overdraft fees are another way banks make money—these are fees that are charged when you try to spend more than you have available in your account.
At Simple, we believe that you should only be able to spend what you have, so we don’t allow you to overdraw your account, and therefore, you don’t have to worry about overdraft fees! You can read more about that here.
3. Legitimacy and trust
Make sure your bank is FDIC insured, which means that your deposits are insured up to legal limits. Every bank insured under the FDIC can be found on the FDIC website under their unique FDIC certificate number. You should be able to easily spot the FDIC symbol on the bank’s website and advertisements as well.
Simple’s partner bank, BBVA USA, is a member of the FDIC!
4. Easy and convenient to manage
Keep it simple (see what we did there!) It’s important that your bank account is convenient and easy to use. If you like the idea of being able to manage your money without having to go into a physical bank, you’ll want to make sure your bank has all the features you need available online and in a user-friendly mobile app.
Simple offers more than just online accounts where you stash your money—it’s a collection of banking and budgeting tools designed to help you build your financial confidence. We want to make it easy, convenient, and dare we say, fun to manage your money. You can use Simple to keep track of your Expenses, know exactly how much is Safe-to-Spend, and set and work towards your short- and long-term financial Goals.
5. Real, human support
While many people looking for a bank focus solely on numbers—such as the interest rate of their accounts and banking fees—it’s important not to forget that time is also money. Whether you have a quick question or you think you might be a victim of fraud, you’ll want to make sure your bank has a user-friendly way of reaching customer support (and a friendly support team on the other end of the line).
Make sure your bank offers a variety of user-friendly ways to help you if you have questions—like through their mobile app, via phone, online chat, and even social media. Ideally, they’ll also have a great library of support articles, so you don’t have to spend too much time waiting for answers to your questions.
At Simple, our goal is to help you build your financial confidence, and offering excellent customer service is a key part of that mission. If you ever have a question about your account, you can reach out directly through the app or call us at (888) 248-0632.
Choose a Bank With…
No or low fees, FDIC insurance, convenience and ease of use, and quality customer service are all important criteria to look for in a bank. If you can earn interest on your account balance, that’s even better!
Simple’s online checking account is a free, easy-to-use checking option that gives you all of these features, plus budgeting tools to help you manage your money with confidence. And, when you also open a Protected Goal Account, you can maximize your savings with a competitive interest rate!
Disclaimer: Hey! Welcome to our disclaimer. Here’s what you need to know to safely consume this blog post: Any outbound links in this post will take you away from Simple.com, to external sites in the wilds of the internet; neither Simple nor our partner bank, BBVA USA, endorse any linked-to websites; and we didn’t pay/barter with/bribe anyone to appear in this post. And as much as we wish we could control the cost of things, any prices in this article are just estimates. Actual prices are up to retailers, manufacturers, and other people who’ve been granted magical powers over digits and dollar signs.